Media Releases | 2nd Mar, 2010

Alcoa ties its future to polluting coal generation

Tuesday, 2 March 2010

Environment Victoria has today condemned Alcoa’s decision to source its electricity from Loy Yang Power’s brown coal power station for the next 26 years.

Environment Victoria Campaigns Director Mark Wakeham said that it was unacceptable for aluminium smelters to be locking in such a polluting power supply until 2036 and that Alcoa should have been looking at renewable energy and gas-fired generation to power its two Victorian smelters:

“In a time of climate change it is insane to power aluminum smelters with brown coal. Victoria is one of the very few places in the world where aluminium smelting is powered by brown coal, with most other producers using hydro power. Locking this behaviour in till 2036 defies belief. If power stations like Loy Yang are still operating in 2036, it will be all over for the climate.”

“News that Loy Yang and Alcoa have signed a ‘carbon reduction agreement’ is only meaningful if it guarantees electricity from a source other than coal. Under the agreement announced last night Alcoa is not committing to power even one light bulb with renewable energy. If Alcoa was serious about providing regional jobs it would be buying wind power from new projects in south-western Victoria and supplementing it with gas-fired power from the nearby Mortlake power station currently under construction and solar thermal power.”

“We fear that this contract could be an attempt to buy an insurance claim against any future action to reduce greenhouse pollution, with taxpayers likely to foot the bill again. The State and Federal governments should immediately guarantee that there will be no future compensation or subsidies for Alcoa or Loy Yang as a result of this deal.”

Mr Wakeham said that it was unclear what the deal meant for the $200 million State Government subsidy Alcoa receives each year to reduce its electricity bills.

“We urgently need clarification of what this deal means for the subsidies the State Government has been paying Alcoa, and whether the Victorian taxpayer is exposed in any way if the deal falls through at a future time when we get serious about climate change. The deal also highlights that there is no need for the State Government to be continuing to pay Alcoa the $200 million per year subsidy until 2016.”

“The only possible up side of this deal is that it means that International Power, the owners of Hazelwood and Loy Yang B, will lose the electricity supply contract for Alcoa and its single largest customer. This should make it easier for the State and Federal Governments to step in and replace Hazelwood, the most polluting power station in Australia, in the next 2 years with renewable energy, energy efficiency and gas-fired power as a transition fuel.”

For further information or comment

Mark Wakeham, Environment Victoria Campaigns Director
03 9341 8127
0439 700 501